Booking Holdings Inc. (BKNG) Financial Analysis

Snapshot

Booking Holdings generated revenue of $26.9 billion in FY2025, up 13.4% in FY2025 against FY2024. Operating income was $8.8 billion in FY2025, while net income was $5.4 billion in FY2025 and diluted EPS was $6.62 in FY2025.

In Q2 FY2026, revenue was $7.4 billion, operating income was $2.5 billion, and net income was $2.0 billion. Diluted EPS was $2.53 in Q2 FY2026 and free cash flow was $3.6 billion in Q2 FY2026. Over the TTM to Q2 FY2026, revenue was $28.2 billion and net income was $7.2 billion.

Growth

Revenue increased 13.4% in FY2025 against FY2024 to $26.9 billion in FY2025. Revenue compound annual growth was 16.3% in FY2022–FY2025 and 31.7% in FY2020–FY2025. Diluted EPS declined 4.12% in FY2025 against FY2024 to $6.62 in FY2025, while its compound annual growth was 29.4% in FY2022–FY2025.

Free cash flow rose 15.1% in FY2025 against FY2024 to $9.1 billion in FY2025, with compound annual growth of 13.7% in FY2022–FY2025. In Q2 FY2026, revenue was $7.4 billion, up 32.9% in Q2 FY2026 against Q1 FY2026 and 8.15% in Q2 FY2026 against Q2 FY2025. Diluted EPS increased 86.0% sequentially and 130.6% year over year in Q2 FY2026.

Profitability

Gross margin was 100.0% in FY2025, unchanged by 0.0 percentage points in FY2020–FY2025. Operating margin rose to 32.8% in FY2025 from −9.28% in FY2020, a change of 42.1 percentage points in FY2020–FY2025. Operating margin increased 1.0 percentage point in FY2024–FY2025.

Pre-tax margin was 25.4% in FY2025, down −5.3 percentage points in FY2024–FY2025 but up 17.0 percentage points in FY2020–FY2025. Net margin was 20.1% in FY2025, down −4.7 percentage points in FY2024–FY2025 and up 19.2 percentage points in FY2020–FY2025. Return on assets was 19.0% in FY2025, compared with 22.6% in FY2024. Return on equity was −112.6% in FY2025 alongside negative shareholders’ equity of −$5.6 billion in FY2025. Return on invested capital was 0.00% in FY2025.

Balance sheet

Total debt was $18.7 billion in FY2025, compared with $16.9 billion in FY2024. Cash and short-term investments were $17.2 billion in FY2025, compared with $16.2 billion in FY2024. Net debt was $1.5 billion in FY2025, following $691.0 million in FY2024.

Shareholders’ equity was −$5.6 billion in FY2025, compared with −$4.0 billion in FY2024, and book value per share was −$6.88 in FY2025. Working capital was $5.6 billion in FY2025. In Q2 FY2026, net debt was $3.0 billion, the current ratio was 1.1×, and debt to equity was −1.9×. The debt-to-equity measure reflects negative equity in Q2 FY2026.

Cash flow & capital return

Operating cash flow was $9.4 billion in FY2025, increasing 13.0% in FY2025 against FY2024. Capital expenditure was $322.0 million in FY2025, below $429.0 million in FY2024. Free cash flow was $9.1 billion in FY2025, up 15.1% in FY2025 against FY2024, and represented 168.2% of net income in FY2025.

Capital returned to shareholders was $7.7 billion in FY2025. Dividends paid were $1.2 billion in FY2025 and net share repurchases were $6.4 billion in FY2025. Weighted average shares were 811.3 million shares in FY2025, compared with 840.6 million shares in FY2024; the share count change was −20.8% in FY2020–FY2025. In Q2 FY2026, weighted average shares were 768.0 million shares.

Valuation

Market capitalisation was $125.9 billion as of September 28, 2026. P/E was 18.0× as of September 28, 2026, lower than the five-year median of 29.2× and the ten-year median of 30.6× as of September 28, 2026. P/E was higher than the industry median of 17.5× as of September 28, 2026.

P/S was 4.5× as of September 28, 2026, lower than the five-year median of 6.5× and the ten-year median of 6.6× as of September 28, 2026, but higher than the industry median of 2.3× as of September 28, 2026. EV/Sales was 4.6× as of September 28, 2026, lower than the five-year median of 6.5× and ten-year median of 6.8×, while higher than the industry median of 2.4×. EV/Cash flow was 13.5× as of September 28, 2026, below its five-year median of 19.3×. P/B was not meaningful: earnings or book value are negative as of September 28, 2026.

What changed since last quarter

Revenue increased to $7.4 billion in Q2 FY2026 from $5.5 billion in Q1 FY2026, a 32.9% increase in Q2 FY2026 against Q1 FY2026, and was 8.15% higher in Q2 FY2026 against Q2 FY2025. Operating margin reached 34.0% in Q2 FY2026, increasing 11.0 percentage points sequentially and 0.9 percentage points year over year. Free cash flow was $3.6 billion in Q2 FY2026, up 17.2% sequentially and 16.1% year over year.

Management attributes year-over-year revenue growth in Q2 FY2026 primarily to merchant revenue growth in accommodation services and the shift from agency to merchant revenue, while foreign currency exchange rates also benefited total revenue. Management cites continued indirect effects of the Middle East conflict, including higher flight prices, reduced capacity on some routes, and weaker long-haul demand, as constraints on room-night growth. Net debt rose by $577.0 million in Q2 FY2026 against Q1 FY2026 and by $2.1 billion in Q2 FY2026 against Q2 FY2025.

Open questions

How will the continued shift from agency to merchant transactions affect operating margins over time?
How will changes in travel demand and flight capacity connected to the Middle East conflict affect booking activity?
To what extent will declining SEO traffic change marketing spending and marketing efficiency?
How will the higher net debt reported in Q2 FY2026 be funded or managed?

Sources

Form 10-Q filed August 4, 2026 — management’s discussion and analysis

This page is for information only. It is not investment advice, a recommendation or an offer to buy or sell any security. Figures come from the sources listed above and may contain errors; verify against the company's filings.